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6 Feb 2015
Broad trend change in EUR vs commodity FX? - JPMorgan
FXStreet (Bali) - The strong EUR recovery against Commodity FX could be part of a broader change, notes Niall O'Connor, FX Strategist at JP Morgan Securities.
Key Quotes
"The latest Eurorally against Commodity FXfaces us with the key-question whether this is just another recovery within a still intact downtrend or a trend reversal on big scale. That said and looking at chart 2 below, it becomes obvious that a trend reversal in EUR/CADis not confirmed as long as key-resistance between 1.4435/85-1.4500 (minor 76.4 %/daily.-weekly trend) is capping the upside."
"Only above the latter the odds would shift in favor of the EUR bulls, which would however still need a break above 1.4645/71 (last major top/50 % on higher scale) to support a minimum rally to the next T-junction at 1.5155 (76.4 %). The break above 1.4408 (minor 38.2 %) in EUR/AUDis also implying that there is more to the upside. But for a game change on big scale it would take a decisive break above 1.5011 (int. 76.4 %), whereas breaks below 1.4478 and 1.4370 (minor 38.2 %/pivot) would neutralize the currently prevailing positive bias again. EUR/NZDis the most promising one for a change after rejecting 1.4478 (monthly trend line support) dynamically, but 1.6052 (int. 76.4 %) would have to be cleared to confirm it."
Key Quotes
"The latest Eurorally against Commodity FXfaces us with the key-question whether this is just another recovery within a still intact downtrend or a trend reversal on big scale. That said and looking at chart 2 below, it becomes obvious that a trend reversal in EUR/CADis not confirmed as long as key-resistance between 1.4435/85-1.4500 (minor 76.4 %/daily.-weekly trend) is capping the upside."
"Only above the latter the odds would shift in favor of the EUR bulls, which would however still need a break above 1.4645/71 (last major top/50 % on higher scale) to support a minimum rally to the next T-junction at 1.5155 (76.4 %). The break above 1.4408 (minor 38.2 %) in EUR/AUDis also implying that there is more to the upside. But for a game change on big scale it would take a decisive break above 1.5011 (int. 76.4 %), whereas breaks below 1.4478 and 1.4370 (minor 38.2 %/pivot) would neutralize the currently prevailing positive bias again. EUR/NZDis the most promising one for a change after rejecting 1.4478 (monthly trend line support) dynamically, but 1.6052 (int. 76.4 %) would have to be cleared to confirm it."